UPDATE 2-Embraer eyes WTO challenge to Bombardier state funding

(Adds reaction from Bombardier, estimate of price for CSeries
paid by Delta Airlines)

By Brad Haynes

SAO PAULO May 16 (Reuters) - Brazilian planemaker Embraer
SA may challenge the state funding received by
Canadian rival Bombardier Inc at the World Trade
Organization (WTO), a senior executive told Reuters on Monday.

Paulo Cesar Silva, the head of Embraer's commercial aviation
unit, said in a telephone interview that favorable government
financing has given Bombardier an unfair advantage in sales
campaigns where its new CSeries is up against Embraer's E-Jets.

"The WTO is an alternative" to resolve the potential trade
dispute, Silva said. "Another channel could be
government-to-government talks. That might be the best way to
avoid a dispute."

Embraer has reached out to the Brazilian government, but
still needs details of Bombardier's financing arrangements
before taking action, Silva added.

Brazil and Canada have locked horns repeatedly at the WTO
over the past two decades regarding state support for Embraer
and Bombardier, the world's biggest commercial planemakers after
powerhouses Boeing Co and Airbus Group.

Bombardier secured $1 billion for its C Series program from
the Quebec government last year and has asked Canada's federal
government to match the investment.

Embraer's concerns about the funding boiled over last month
when Bombardier won an aggressive bid for 75 aircraft for U.S.
carrier Delta Air Lines Inc.
Continued...